The EURUSD has been trading in a bullish price channel as visible in this H4 chart. This currency pair started to form this chart pattern after it hit new multi-month as well as 2013 lows due to the Cypriot bailout situation. The establish chart pattern has been very strong and we believe the EURUSD currency pair will move higher back into its ascending resistance.
MACD has shown severe improvement and currently flirts with a bullish centerline crossover. RSI has reached oversold territory, but managed higher lows and confirm the bullish chart pattern. A breakout from oversold territory should accelerate the move higher.
We recommend a long position at 1.2780 with a potential second entry level 1.2700. We also advise traders to place a stop sell order at 1.2730 in order to hedge against potential capitulation moves.
Trades who wish to exit this trade at a loss are advice to place their stop loss order at 1.2730. We will not use a stop loss order and execute this trade as recommended. Place your take profit level at 1.2850.
Here is why we believe the EURUSD forex pair will move higher
- EURUSD has been trading in a bullish price channel
- Currency pair trades at ascending support levels
- MACD has confirmed the bullish chart pattern and flirts with a bullish centerline crossover
- RSI has reached oversold territory and confirmed the chart pattern with higher lows
- Short covering rally
- Temporary stability in the Eurozone
